HRM assignment on British Airways
“Our concerted efforts to introduce permanent structural change across the airline has led to a reduction in non-fuel costs and a return to profitability. Revenue has increased, driven primarily by yield improvements and, while fuel costs have risen, they are in line with our expectations. Our focus on permanent structural change will continue. This summer we agreed a new productivity deal with our Heathrow terminal-based staff that will provide a more flexible, cost-efficient and customer focused ground operation. In addition, the first of the cabin crew recruited on new terms and conditions have completed training and start flying on Monday.
“At a strategic level, we launched our transatlantic joint business with American Airlines and Iberia earlier this month, having received regulatory approval in the summer. Also, we expect to complete our merger with Iberia in January 2011. Regulatory information about the merger has been sent to shareholders in advance of shareholder meetings on November 29 to seek approval for the merger.
“Our customers remain our main focus. Our first two Boeing 777-300ER aircraft – with new cabins and in-flight entertainment throughout – are now in operation with the third scheduled to enter service next month. Customer reaction to the new aircraft has been fantastic. We announced new routes from Heathrow to Tokyo Haneda and San Diego, Gatwick to San Juan in Puerto Rico and London City to Stockholm that will start next year. A new winter ski route from London City to Chambery will launch in December.
“Despite disruption caused by numerous air traffic control strikes across Europe this summer, 74 per cent of our Heathrow flights and 84 per cent of our Gatwick flights departed on time,significantly outperforming our major competitors.”
4) terms of reference /statement of purpose
This report is about a very well know and famous company of United Kingdom which is known as British Airways which is the United Kingdom’s largest international airline, with routes to over 550 destinations towards all over the world. The British airline is world’s renowned for their high standards and international recognitions all over the world and they also have being featured in many reviews by airline critics as well as passengers. As a part from just offering flights, British Airways keeps its status up to the mark within the airline industry which offers a commitment and excellent service levels of work.
British Airways has evolved from many years with the airline industry. And this was owned by Comair Limited since 1992, this company was started off with low rate of beginnings as Aircraft Transport and Travel in 1919, with its maiden flight from Le Bourget to Honslow in August 1919. Later, with the merger of a few other airlines due to the decline of the industry, this British airline was named Imperial Airways and was the first major British carrier. At that time, they operated with only 18 aircraft and 250 employees.
Soon after their collaboration with Qantas to launch the first flight to Australia and with the acquiring of more aircraft, British Airways Limited was created which was a merger between Imperial Airways and the British Overseas Airways Corporation (BOAC). After World War II, with more transatlantic flights added, another sister airline was also created just to handle these flights. It was known as the British European Airways (BEA). Through the years, British Airways has continued steady growth, incorporating newer and more sophisticated aircraft and as well as running the Concorde since 1979.
The success of British Airways could mostly attribute to its continuous addition of more international flights as well as the expansion of their fleet. Apart from that, the entire airline boasts of features which provide their passengers with the best valuable comfort service.
2] Human resource management
MEANING AND DEFINITION
Personnel refers to the employees working in an organization at different levels. Personnel management (also called human resource management) is that aspect of total business management, which deals with human relationships within an organization. Personnel represent human resource, which is different from material resources.
Human resource is the most productive and most versatile. In addition, the manpower in an organization needs human treatment. Employees have a capacity to feel, think and even to react. Management has to deal with the employees in a careful and tactful manner. Material resources such as land, machines, raw materials, equipment, etc. are easy to manage. This is because they have no capacity to feel or think or react. This is not the case with human resource i.e. manpower. Man and machines are not on par and must not be treated in the same manner. This is because of all the resources manpower is the only resource, which does not depreciate, with the passage of time. According to Peter F. Druckert UtIle prosperity, if not the survival of any business depend on the performance of its managers of tomorrow.” The material resources alone will not help the organization to achieve its objectives. For this, effective co-ordination and utilization of material and human resources are required. This suggests the importance of human resources.
The human resource is very important and useful. It should be nurtured and used for the benefit of the organization. This is a challenging job before personnel manager/management. The organization can make rapid progress only when the employees are satisfied and co-operative. On the other hand, the organization will have to face various problems and difficulties, if the employees are not co-operative but hostile. This indicates that human resource is most strategic and critical determinant of growth of a business unit. Every organization needs loyal, efficient and satisfied labour force. For this, adequate attention should be given to personnel management.
FUNCTIONS OF HRM
A personnel manager has to perform the basic functions of management. These managerial functions include’ planning, organizing, directing and controlling personnel. The operative functions of the department are: procurement of staff, development of staff through training, payment of compensation to staff i.e. wages and salaries, integration of manpower i.e. fair reconciliation of individual, social and organizational goals and interests and maintenance of staff i.e. providing them safety at the work place and also to offer welfare facilities and conveniences to employees. In brief, personnel management involves the following operational functions:
(1) Procurement of manpower: Procurement means acquiring the manpower required by an organization from time-to-time. The basic Principle in procurement is “right man for the right job”. The procurement function includes manpower planning and forecasting, recruitment, selection, appointment, placement and induction of employees so as to have a team of efficient and capable employees for the benefits of the organization. Even promotions and transfers are covered by this broad personnel function.
(2) Development of manpower: Development of manpower (human resource development) means planning and execution of the training programmes for all categories of employees in order to develop new skills and qualities required for working at the higher level. Manpower development is possible through training and career development programmes and not simply by offering attractive wages to workers. Executive development programmes are introduced for the benefit of higher-level managers Similarly; future manpower requirement will be, met internally through HRD programmes. It aims at educating and training employees for the improvement of overall performance of an organization. HRD (Human Resource Development) programmes are for education, training and development of existing manpower in an organization. This is for facing new problems and challenges likely to develop in the near future.
(3) Compensation payment to manpower employed: One function of HRM is to pay compensation (in monetary form) to employees for the services rendered. For this, a fair system of remuneration payment (wages and salaries) needs to be introduced. Remuneration to employees should be attractive so that the labour force will be satisfied and disputes, etc. will be minimized. Fair wage payment acts as a motivating factor.
(4)Integration of interests of manpower and the organization: Manpower is interested in wage payment while organization is interested in higher profits, consumer loyalty, market reputation and so on. HRM has to reconcile the interests of the individual members of the organization with those of the organization.
(5) Maintenance of manpower: This manpower function relating to maintaining satisfied manpower in the organization through the provision of welfare facilities. For this, attention needs to be given to health and safety measures, maintenance of proper working conditions at the work place, provision of welfare facilities and other non-monetary benefits so as to create efficient and satisfied labour force with high morale. Even collective bargaining and workers participation come within this broad personnel function.
(6) Provision of welfare facilities: Employees are offered various welfare facilities. They include medical, educational, recreation, housing, transport and so on.
(7) Misc. functions: Misc functions under HRM include maintenance of service records of employees (which are used for promotions/transfers performance appraisal, etc.), promotions and transfers of employees, maintaining cordial industrial relations, introduction of rational grievance procedure, performance evaluation of employees, career planning of employees, maintenance of discipline, administering the policies with regard to disciplinary action and compliance of various labour laws.
International HRM for British airways
Globalization of business has resulted in the growing acknowledgment of the value of a well-managed employees and the fruition of the human resource function from being sighted as a support function to one of strategic significance (Scullion and Starkey, 2000).
British airlines can put one of the three different approaches to recruitment (Francesco and Gold, 1998):
1)Ethnocentric:-The central focus of this approach is home country practice , where headquarters from the home country takes foremost decisions, employees from the home country cleave to vital jobs, and the subsidiaries pursue the home country resource management act.
2)Polycentric:- In this approach, every subsidiary directs on a local basis, where a local employee heads a subsidiary since headquarters’ managers are not believed to have sufficient local knowledge, whereas subsidiaries habitually expand HRM practices locally.
3)Geocentric:-In this approach, the company manages employees on a global basis , recruiting and developing a group of international managers from various countries, who comprise a movable base of managers who are taken use in a range of facilities as there requires.
Geocentric staffing policy will appoints the best person no matter what nationality he/she has. Some of those international staffing strategies are good in particular situations. Nevertheless, none of them is without its disadvantages looking from different perspectives.
Training and development
It is necessary for industry to rethink attitude towards investment in human capital. Training and development is not luxuries investment but rather necessary to meet needs that raised by technology and by the customer and labour force. As Olsen (1995) state: “managers have to re-examine attitude to the way human resources can be used to meet both customers’ and employees’ needs, requiring an in-depth analysis of the spectrum of human relations
Training is regarded as a key tool in the implementation of HRM polices and practices, particularly those involve cultural change and new working practices introduction. Holden (1994) points out that one of the most vital steps in HRM plan is to analyze the training needs of the organization in relation to the organization’s strategy and link it with the needs of the individual within it. Under multi-national environment, culture training is necessary with the role of cultural training, which can encompass:
1) The corporate norms and values which operate in company,
2) Language and other training related to the creation of a better understanding of the national culture of the parents or off-shore customer.
Rewards and recognition
Organization’s rewards and recognition system reflect organization’s attitudes, intention and entire organizational culture. An effective rewards and recognition system is a useful tool to motivate employees (Byars & Rue, 2003).
Management should understand what employees regard as meaningful rewards. Pay is part of the issues; Rewards should be viewed in a large perspective. It can also be working environment, office equipment, and informal recognition etc. (Byars & Rue, 2003).
Remuneration is one of the important parts of reward system. It is directly linked to staff performance and motivation. However, in an international environment, different economic systems, development levels, political and institutional contexts, traditions and cultures make it difficult to find a uniform method for comparison (Logger, Vinke, Kluytmans, 1995.
Blacker et al (1999) contend that previous international HRM researches emphasized chiefly on the cultural relativity of HRM practices, interpreting that the enlargement of a company’s HR policies are theme to cultural influences and that international organizations ought to take these culturally based differences into consideration whilst operating globally. Even though a great deal of this literature is not overtly tagged international HRM, it handles themes of cultural differences in management style, employee motivation, leadership style, negotiation style, with that of cross-cultural training . Markedly therefore, the key concern of cross-cultural management of British airways would require to have focus on management style, employee motivation, leadership style, negotiation style, with that of cross-cultural training.
External conditions cover economic conditions, govt. regulations and union expectations. Economic conditions are employment rates, nature of inflation affect the behavior of the human resources showing reluctance to leave job, demand for overtime etc. Govt. regulation like pension and benefit regulations, health and safety guidelines and immigration provisions etc. affect the Human Resource decisions. The existence or unions prevents the flexibility in designing Human Resource Programs. Union strategies and their negotiation have greater impact on external conditions.
This comprises mainly with the internal environment like nature of the organization, nature of the work and also the employee working conditions.
The Employment Relations Effects
The HRM literature suggests that for human resource policies to produce a significant, positive impact on the “bottom line” of any organization two critical preconditions must be achieved: (1) external fit (that is, a close two-way fit relationship between the nature of the business model and the composition of the HRM policy mix); and (2) internal fit (that is, the existence of a complementary, mutually reinforcing set of HRM policies). However, what still remains unresolved in the relevant literature is whether any positive bottom line impact comes via a negative impact on the workforce (“working harder”) or a positive impact on workforce attitudes and behavior (“working smarter”).
Boxall (1999) draws a distinction in employment strategy between human capital advantage (recruiting and retaining outstanding human talent) and human process advantage (fostering learning, cooperation, and innovation). The detailed study of Southwest certainly suggests the importance of the human process advantage (Gittell 2003).
IHRM Policies and Practices
There are at least three ways of enhancing internal operations through IHRM policies and practices. The first entails matching and adapting HR practices to closely accommodate the unit’s competitive strategy, local culture, and governing legal system. The second necessitates creating a modus operandi whereby HRM practices can be modified swiftly to respond to changing host conditions. The third calls for a set of IHRM policies at the MNE level that can encompass and legitimize the HRM practices of the local units.
Conclusion and Recommendations
HRM process is a continuous process which inter relates all the Human Resource functions, and more specificity is important. Right number of people in right time and made available through HRM which is required to achieve the objectives. Job analysis selection process adapted to the organization’s culture and working environment are more helpful for the purpose, with the organizations change over time there must be good matching of individual abilities with organizational needs for the future. Employee training and management development are duly emphasized for the same purpose. Effective performance depends on extrinsic term like, Job design working condition, job security and satisfactory supervision and intrinsic factors of achievement, recognition responsibility from the work etc.
While using the different models of HRM in international prospective it is clear that the cultural environment, the nature of the multinational industry, the extent of reliance of the MNCs (multinational companies) on its home country, domestic market and the attitudes of senior management play a significant role in minimizing the human resource activities between domestic and international perspectives. A global perspective in MNCs, degree of Centralization or decentralization, limited resources, nature of operations, firm’s size, professionals with international experience, need for expatriate compensation and international growth strategies etc. have also severe impact on the successful implementation of any of the models of HRM as detailed earlier. Practically HRM output is the central point in selecting the feasible model applicable in the environmental context. Nowadays in competitive global context, introduction of MBO (Management by Objective), Management by Exception, Human Resource Development activities through proper recruitment, selection, training and motivation would facilitate the increasing productivity of the available human resources. All these might be facilitated through application of different human resource models in the context of the environmental strength, opportunity, threat and weakness of the concerned business.
British Airlines centrally focuses on the vital significance of the close integration of HR policies, systems and activities with business strategy and in this way its HRM approach can be labeled as hard approach. However, markedly, at the same time, it realizes group benefits program not only for employees’ financial benefits, but also career advancement. These suggest that a British airline has a balancing approach of HRM. However, if the British airlines wish to continue its competitive advantage in terms.
However, if the British airlines wish to continue its competitive advantage in terms of HRM, the management will require exploiting the opportunities offered by knowledge economy, particularly in the context of its global operation.
References and Bibliography
Aer Lingus. 2003. Annual Report. Available at www.aerlingus.com.
Baseler, R. 2004. “Low Cost Carrier Market.” Presentation by Boeing commercial Airplanes, March.
Boxall, P. 1999. “The Strategic HRM Debate and the Resource-Based View of the Firm.”
Byars, L. L., & Rue, L. W. (2003). Human resource management, McGraw-Hill, NY.
Beardwell I. & Holden L. (1994), HRM: A contemporary perspective, U.K.: Pitman Publishing
Cry, D. J. (1995). The Human resource challenge of international joint ventures,
Quorum Books, Westport, CT
Cassani, B., and K. Kemp. 2003. Go: An Airline Adventure. London: Time Warner
Francesco A.M. and Gold B.A. (1998), International Organizational Behavior, Prentice Hall Inc., London
Gittell, J. H. 2003. The Southwest Airlines Way: Using the Power of Relationships
Logger, Vinke, & Kluytmans, Compensation and appraisal in an international perspective, in Harzing, Ruysseveldt, (1995, edited)
McGraw Hill. ITWF. (2002). “ITF Survey: The Industrial Landscape of Low Cost Carriers.” London Metro, November 22, 2005. Achieve High Performance. New York
Olsen, M. (1995). Into the new millennium: A white paper on the global hospitality industry in Medlik, S., & Ingram, H. (2002). The business of hotels, (4th ed.)Butterworth-Heinemann, Oxford.